Co-investing fund Endeavor South Africa has raised R190-million in the final close of its Harvest Fund II.
The amount raised is more than double the amount it first set out to garner, making it the most active venture capital investment fund in South Africa.
The fund has made ten co-investments in the past year, with six more in the immediate pipeline.
Most recently, Endeavor South Africa, which comprises a group of high-impact entrepreneurs, invested in world-leading chat commerce platform Clickatell. Other investments by the fund went to digital financial institution TymeBank and data automation platform Synatic.
Fundraising lead for the Harvest Fund Antonia Bothner says the co-investment and rules-based nature of Fund II makes it a very efficient fund and the first of its kind in Africa.
Fund II follows the terms of the lead investor, enabling Endeavor South Africa to actively assist entrepreneurs in raising capital through access to the global group Endeavor’s investor network, and supporting them to negotiate terms with the lead investor before Fund II joins the round.
This enables Fund II to rapidly deploy capital into its network of Endeavor entrepreneurs and stay aligned with the founder, explains Bothner.
Endeavor South Africa believes investors are seeing the potential of African tech venture capital. For example, investment platform Partech Africa finds in its research that 640 African tech startups raised a total $5.2-billion across 681 equity rounds in 2021.
This makes Africa tech venture capital the world’s fastest-growing ecosystem.
About 20% of Fund II’s carry will be reinvested back into Endeavor’s nonprofit activities to continue its work, to crowd-in high-growth entrepreneurs, attract capital and create jobs.
Endeavor as a global group catalyses what it calls high-impact entrepreneurship in Southern Africa and across the world through a rigorous selection process and mentorship programmes, with more than 180 mentors present in South Africa and more than 5 000 globally.
Endeavor South Africa now supports more than 100 high-growth businesses, which range from early-stage (annual revenues of R1-million) to large firms with a turnover of R1-billion a year. It aims to be fully invested by the end of this year.
Bothner says the Harvest Fund’s investors are passionate about nurturing South Africa’s vast entrepreneurial spirit by providing much-needed capital and thereby driving job creation and economic growth.
“The growth sector in Southern Africa is still nascent and the opportunities are still plentiful and growing. The beauty of the way our Harvest Fund II is structured and positioned is that there is ample room for both growth and impact.”